Money, Honestly podcast: A career and life plans derailed by the pandemic
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Danny was luckier than most when he lost his job at the end of April, weeks after the big wave of layoffs hit the U.S. The major rideshare company provided him with what he described as a “generous” severance package, which is not the case for many.
While 3 in 10 employers in North America have a formal written severance policy, the policy is typically only available to management and senior executives, according to a 2019 Randstad Risesmart survey of 1,500 HR professionals.
“When I saw the details of the severance, it put me at ease because it's a very generous severance,” said Danny, 29, who didn’t want his full name to be used because of an agreement he signed with his former employer. “But it's also not lost on me how many people don't have a generous severance and how painful things are and will be for them.”
Danny’s package included the continuation of his health insurance through the end of October on his employer’s dime, 10 weeks of pay, and accrued time off. While that and his savings help to mitigate a serious hit to his personal finances, his plans to buy a house and grow in his career have been shelved.
“I was on a fairly strong trajectory internally within our company,” Danny said. “I was going to be in a, not lucrative, but a very professionally good place.”
Danny had been saving for a down payment for a year and a half but is now using those reserves to pay for bills. He said that he’ll likely have to start over again once he gets hired.
He also learned that he likely won’t get his previous job back, so he expects he’ll need an additional few months to find another. He’s limiting his spending in the meantime.
“I'm definitely going to just pull back the reins and tighten everything down and spend as little as possible,” Danny said, “because you just don't know how long that's going to last.”
Denitsa is a reporter for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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